President Trump signed an Executive Order titled Unleashing American Energy: MSIADA Analysis

President Trump signed an Executive Order titled Unleashing American Energy.

Here is the specific language from the EO: From Unleashing American Energy

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered:

Section 1.  Background.  America is blessed with an abundance of energy and natural resources that have historically powered our Nation’s economic prosperity.  In recent years, burdensome and ideologically motivated regulations have impeded the development of these resources, limited the generation of reliable and affordable electricity, reduced job creation, and inflicted high energy costs upon our citizens.  These high energy costs devastate American consumers by driving up the cost of transportation, heating, utilities, farming, and manufacturing, while weakening our national security.

It is thus in the national interest to unleash America’s affordable and reliable energy and natural resources.  This will restore American prosperity —- including for those men and women who have been forgotten by our economy in recent years.  It will also rebuild our Nation’s economic and military security, which will deliver peace through strength.

Sec. 2.  Policy.  It is the policy of the United States:

To eliminate the “electric vehicle (EV) mandate” and promote true consumer choice, which is essential for economic growth and innovation, by removing regulatory barriers to motor vehicle access; by ensuring a level regulatory playing field for consumer choice in vehicles; by terminating, where appropriate, state emissions waivers that function to limit sales of gasoline-powered automobiles; and by considering the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs over other technologies and effectively mandate their purchase by individuals, private businesses, and government entities alike by rendering other types of vehicles unaffordable;

It’s a little bit unclear right now where we stand since the 25E is a tax credit that goes to the individual (purchaser of a previously owned clean vehicle) and we can’t be certain whether the freeze applies to qualified vehicles purchased in the 2024 calendar year or only a purchase made from 5 PM ET today onward.

While the executive order does eliminate the EV mandate, it does not discuss the 25E tax credit specifically, nor does it address pre-owned EVs or “clean” vehicles. The language that would apply to 25E credits is, “and by considering the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs over other technologies and effectively mandate their purchase by individuals, private businesses, and government entities alike by rendering other types of vehicles unaffordable,” which on its face does not outright end credits that could fall under the umbrella.

Bottom line, in light of the freeze, it may not be wise to use 25E as a selling point to potential buyers in the next two weeks, since it is unclear whether the buyer will be able to get the credit in 2025. For those filing taxes in the coming weeks for 2024, we believe they should still claim the credit for qualified vehicles purchased in 2024. The IRS likely will put out guidance if any credits are canceled before most folks begin filing for last year if there are credits that are impacted.

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